You should buy a 1 to 2 karat diamond and let her pick the setting.
Woman generally think bigger is better.
Diamonds are rated and appraised
http://health.learninginfo.org/diamond-ratings.htm
http://www.debeers.com/page/guidance&layout=popups
http://www.gia.edu/
Go research the quality of the diamond at your local jeweler then broaden you search to diamond districts like 47th ST in NYC.
Never buy the diamond without a appraisal, in NYC I would go to Macy's for the appraisal. I would stick with a GIA certified diamond.
Cost is somewhere around $5,000 to $10,000 for good quality.
Diamonds (high quality) generally hold value and do not wear out unlike a bike.